Poverty Analysis Using an International Cross-Country Demand System

Cranfield, J. A. L. ; Preckel, Paul V. ; Hertel, Thomas W.

World Bank, Washington, DC

关键词: AGRICULTURAL PRODUCERS;    BASE YEAR;    CONSUMER DEMAND;    CONSUMER PREFERENCES;    CONSUMER PRICE;   

DOI  :  10.1596/1813-9450-4285
RP-ID  :  WPS4285

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper proposes a new method for exante analysis of the poverty impacts arising from policyreforms. Three innovations underlie this approach. The firstis the estimation of a global demand system using acombination of micro-data from household surveys andmacro-data from the International Comparisons Project (ICP).Estimation is undertaken in a manner that reconciles thesetwo sources of information, explicitly recognizing that percapita national demands are an aggregation of thedisaggregated, individual household demands. The secondinnovation relates to a methodology for post-estimationcalibration of the global demand system, giving rise tocountry-specific demand systems and an associatedexpenditure function which, when aggregated across theexpenditure distribution, reproduce observed per capitabudget shares exactly. This leads to the third innovation,which is the establishment of a unique poverty level ofutility and an appropriately modified set ofFoster-Greer-Thorbecke poverty measures. With these tools inhand, the authors are able to calculate the change in thehead-count of poverty, poverty gap, and squared poverty gaparising from policy reforms, where the poverty measures arederived using a unique poverty level of utility, rather thanan income or expenditure-based measure. They use thesetechniques with a demand system for food, other nondurablesand services estimated using a combination of 1996 ICP dataset and national expenditure distribution data. Calibrationis demonstrated for three countries for which householdsurvey expenditure data are used duringestimation-Indonesia, the Philippines and Thailand. To showthe usefulness of these calibrated models for policyanalysis, the authors assess the effects of an assumed 5percent food price rise as might be realized in the wake ofa multilateral trade agreement. Results illustrate theimportant role of subsistence expenditures at lowest incomelevels, but of discretionary expenditure at higher incomelevels. The welfare analysis underscores the relativelylarge impact of the price hike on poorer households, while amodified Foster-Greer-Thorbecke poverty measure shows thatthe 5 percent price rise increases the incidence andintensity of poverty in all three cases, although thespecific effects vary considerably by country.